Nomura kicks off property push in Germany

The Japanese bank is to buy €800 million worth of German DIY stores as part of a drive into alternative investments.

Nomura International has agreed an €800 million ($1 billion) property deal with Germany’s second biggest DIY chain.

In linked transactions, Germany’s second biggest home improvement group Praktiker is buying the operational assets of smaller rival Max Bahr, the country’s eighth largest DIY chain with 76 stores.

Nomura is to acquire and lease back all 76 properties to Praktiker, which will keep a 24 percent stake in a vehicle called Moor Park Holdings Luxembourg Sarl.

Nomura refused to comment on the deal before completion. However, it marks an important milestone for the bank in Europe having revealed in April the creation of European Funds Group (EFG), a new strategic alternative investment fund into which it is injecting €325 million ($418 million) of equity.

The first two funds are focusing on mezzanine finance through the European Mezzanine Fund 1 and real estate through the Real Estate Return Enhancement Fund 1. The Max Bahr properties will be owned by the real estate fund.

Gary Wilder, former head of Nomura’s asset finance group, is head of EFG along with Santiago Corral, former head of the firm’s mezzanine business.

Wilder’s previous deals include the purchase of London’s Earls Court and Olympia exhibition and conference centres for €370 million ($476 million) in 2004 as part of a consortium.

Germany is currently Europe’s hotspot for property investors. The Eastern European market, where Nomura’s real estate portfolio is allocating up to 30 percent of assets, is also active.

Nomura is focusing on corporate and government restructurings. One of the key backers of the real estate fund is a secretive UK property company which has also been active in Continental Europe.